Anyone who works within the shipping industry is most likely aware of the recent changes to freight classifications by the National Motor Freight Traffic Association (NMFTA). These changes could ultimately have some far-reaching consequences for the shipping industry as well as creating uncertainty and anxiety for shippers. But put your mind at ease, LTX Solutions is here to provide you with all the information you need to make informed strategic decisions regarding your freight shipping. This article will provide an overview of the classification changes as well as highlighting areas of interest regarding LTL shipping.
NMFTA Changes Overview
The original NMFTA freight classifications operated using a nine-tier rule system. This has been standardized into an 11-tier class system. The full notice published by the NMFTA can be viewed here, but we will hit some of the highlights below:
• New regulations regarding protection for glass were added. • Packages identified as “likely to be damaged” must be “overpackaged”. • Unique item numbers were established for temperature-controlled freight, dietary supplements, and solar panels. • Containers on wheels must possess locking devices to anchor them in place. • Paper goods have had their freight class changed to 125. • Shipments with a density of 4 but less than 6 pounds/cubic foot (Sub 4) have been adjusted from class 150 to class 175. Furthermore, if a shipment’s density is calculated incorrectly, the package is “bumped” (item 170) to the lowest density freight class provided for calculating freight charges.
The final bullet point in bold is perhaps the most consequential change by the NMFTA. These changes will most likely lead to increases in freight class charges for shipments with densities of Sub 4.
What Does This Mean For LTL?
Because most LTL shipments usually are classified at Sub 4 many shippers utilizing LTL may see their shipping costs rise. This will most likely occur to balance out the changes to packaging requirements which can affect the density of shipments. Shippers should be prepared to experience increased levels of LTL expenditures. Furthermore, rates may change to reflect lower-density rates due to overpackaging requirements as stated above.
How Can These Changes Be Addressed?
The most important thing shippers should do to address these changes is to reexamine your carrier-client agreements. If you do not have one of these in place, you may experience greater inflexibility for freight classification within FAK (Freight of All Kinds) classes. If you don’t have one of these contracts, you should work to implement one immediately. If you do have one, you should examine it for any classification gaps for Sub 4 shipments. These gaps could lead to increased costs for the shipper. If your carrier-client agreements possess any gaps you should try to renegotiate to plug these classification holes. For example, reclassifying a class 175 shipment to a FAK class 150. This is where a reputable 3PL can come in handy. 3PLs such as LTX can negotiate on your behalf and work to create the most optimal FAK agreement possible. This can save you both time and money in the future as well as give you access to a wealth of experience and expertise within the field.
How to Prepare for These Changes
It is extremely important for shippers to have a firm grasp on freight classification and how it affects them. Failure to do so can result in misidentification of shipments’ density and dimensions which can lead to greater spending. Invest in improved auditing processes or outsource to a reputable freight audit company. This can help prevent human error costs such as double billing and classification errors. Investing in a TMS can also be a good idea to streamline the classification process and improve efficiency.
Collaborating with a reputable 3PL such as LTX can provide all these services and more. LTX has the technology and expertise to handle all your freight class concerns as well as any other shipping problems you may experience. Our processes can drastically reduce your shipping costs as well as cut-down on the potential for error. This partnership can free up your resources and allow for greater focus on your core competencies. If you would like to take the next step and work with our team then contact us below today!